[dave_dj1]

Some of you may remember a previous post from me about building a new home and the customers bank wanting some strange info. Well the homeowners have switched banks. This new bank is much better to deal with but they are not without some things I see as problems.
The thing that really bothers me is that they will not pay for any materials ordered or stored for the job and do not pay any money down, they only money they will release is for things already done and percent complete.
The bank told me the other day that the HO was solvent enough to pay my payments that are outlined in my contract and that when the bank inspects and writes a check to HO and myself that the HO would be reimbursed at that time. Well I met with the HO's yesterday and they tell me they are not in the position to pay the payment as outlined. I do not want to have to finance the job. It will be a nice money making job for us but not if I have to finance it.
I am working on a different payment plan to try and help them, they will have to come up with less money but I will be on the hook for more material than I would like to be.

Any insight greatly appreciated as always.
If it matters this is a 300k project. HO's already have done the following out of pocket on the property:
bought land, put in driveway, foundation is in and capped, decks are framed, well is in, septic is in and underground power is in. All of this work was paid for out of pocket. They are not looking to get any of that money back through their mortgage. All the money they are borrowing is going to finish the project.

As i said before, I haven't had to deal with banks in a very long time so I'm not up to speed with the norm.
thanks,
dave

 

[Metro M & L]

Sounds like your customer is lying. Time to call their bluff. Its your way or the highway. This is critical on a job of this scope. If youre a pushover now they will run all over you refusing change orders, delaying decisions, changing their minds and generally making your life hell.

My question is where are the other three contractors? Call them up and see how things went witb the foundation, septic and electrical contractors. Maybe the owners dont need to put that work on the note because they never paid for it!

 

[huggytree]

your the boss...you make the rules as far as payment.....if the bank/homeowner cant come up with the payments your business needs then dump them and move on to the next customer...

you require a down payment and the customer cant come up with it then they arent a customer right?

 

[Roofcheck]

One must ask why would they choose to pay it of pocket on those items and not make the construction process simple and easy.

How will change order and add-ons be paid for?

 

[Framer53]

Guys this is entirely normal procedure.

If you can't live with it, move on.

 

[dave_dj1]

Guys this is entirely normal procedure.

If you can't live with it, move on.

Well we moved on today!
I am contacting my attorney tomorrow as they have signed a proposal and have given all my paper work to the bank. The timberframe package is due to be started in a week.
OH well.
I'm not sure if I'm relieved or angry as there were several red flags along the way.
I have never seen customers so in-decisive on everything.
As the saying goes "I never lost a cent on a job I didn't do".
The really sucky thing is I have tons of hours invested meeting with them to discuss details of almost every aspect from the underground power they put in not being sufficient to the truss design not being energy efficient compliant.
I'm curious as to what the bank is going to say at this late date.
Good luck is all I can say to them.

 

[dave_dj1]

Sounds like your customer is lying. Time to call their bluff. Its your way or the highway. This is critical on a job of this scope. If youre a pushover now they will run all over you refusing change orders, delaying decisions, changing their minds and generally making your life hell.

My question is where are the other three contractors? Call them up and see how things went witb the foundation, septic and electrical contractors. Maybe the owners dont need to put that work on the note because they never paid for it!

Yeah, there were plenty of red flags. the lady at the bank told me that they were solvent enough to pay the down payment and when she wrote the first payout that the HO's could be reimbursed. They still say they have no money to put down and I should float it until the bank pays and this is the norm. Well it's not the norm for us!
I told them way back when (at least 4 months ago) that I was not going to finance their project. OH well.

 

[WBailey1041]

Yeah, there were plenty of red flags. the lady at the bank told me that they were solvent enough to pay the down payment and when she wrote the first payout that the HO's could be reimbursed. They still say they have no money to put down and I should float it until the bank pays and this is the norm. Well it's not the norm for us! I told them way back when (at least 4 months ago) that I was not going to finance their project. OH well.

Good for you. Smart smart smart. Your way or the highway!